Elon Musk, Tesla’s director and founder, stated that if Western countries do not impose customs taxes, i.e. protectionism, on Chinese electric car companies, the latter will wipe out Western companies because Western cars cannot compete with Chinese companies on both price and quality.
Published on: 01/26/2024 – 17:47
3 minutes
It was announced at the same time that Tesla would manufacture cars, starting in mid-2025, that would compete with cheap Chinese cars.
What Musk is saying now has been expected for some time, as BYD cars are 30% cheaper than their counterparts, and they are preparing to invade Europe starting this year.
Therefore, the European Commission decided to open an investigation into the Chinese state’s support for BYD, and also began setting new standards for importing Chinese cars, including, for example, the amount of pollution resulting from car manufacturing, and not just car pollution.
It is clear that protectionism has begun in the United States against electric cars and batteries, but it seems inevitable that Europe will exercise some kind of protectionism in this sector.
The problem in Europe is that European car manufacturers rely heavily on selling their cars in China, which is their largest market, and therefore any protectionism will be met with another protectionism this time, contrary to the first trend.
Some major Western companies, such as Volkswagen, Mercedes, and Tesla, are still betting that China will not reciprocate the West because they manufacture in China, and therefore this may mean huge losses for China in terms of investments.
Whatever the situation, Musk’s statement indicates that China will occupy the first place in the automotive sector in the world for a few years,
In the new equations, all national Western industries have relied on Chinese electric batteries for several years, just as the West has relied on foreign oil for many decades.
The day after this announcement, Elon Musk continued to announce the development of his company Tesla’s strategy in the context of his talk about the Chinese electric car industry. The recent statements constituted a fundamental event in the world’s stock exchanges, and led to a decline in Tesla’s share price by more than 12⁒, despite the increase in sales by 23⁒ over the year. past.
This decline came as a result of Musk’s statements, who said that the company is passing between two waves of growth, and investors and speculators have interpreted that the company will not witness growth at the current stage, perhaps until mid-2025.
Tesla is preparing to produce new cars that will reach a wider audience, to compete with Chinese cars, which Musk said are now controlling the global market for electric cars.
It is noteworthy that the European Commission, which is currently studying whether the Chinese state provided support to the electric car industry in violation of World Trade Organization decisions, will necessarily reach a decision that will significantly raise customs taxes on Chinese electric cars, and some estimates reach 25⁒ or 30⁒, which is the tax. Customs duties that allow equal costs between Chinese cars and European cars.
2024-01-26 16:47:48
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